EXTRAS FOR EXPERTS: HOW TO SECURE AND ENFORCE YOUR LEGAL RIGHTS IN THE FIRST-EVER DIGITAL CANTON FAIR

Written by Jamie Rowlands, IP Expert and collaborator of the China IPR SME Helpdesk

COVID-19 is rapidly changing the way we live as well as the way we do business. Therefore, the Canton Fair, China’s largest import and export fair, will unsurprisingly need to revolutionise how its 127th event is ran when it takes place in Guangzhou between 14th and 25th June. It will move the business from offline to online and will go completely digital for the first time.

This article looks at how a digital Canton Fair will work in practice and, more importantly, how it could impact the strategy for companies who might need to enforce their IP.

What is happening to the sellers and buyers?

Sellers

The sellers will have the capability to upload the introductions in advance including the pictures, descriptions and even the technology, etc., which the products apply to the trade platform.

With the AR technology, all-round 3D display for the products could be available. All the above information could be previewed by the attendees via the internet before the trade.

Buyers

As a buyer, it will be possible to access real time 24-hour live shows that display the products and allows real-time dialogue with the sellers. All the live shows can be played back at the convenience of the buyers.

The buyers will be able to access the Canton Fair online and easily find products they are interested in. They will be able to look around and negotiate deals as effectively as if they were physically at the Canton Fair, but without the crowds and queues.

Canton Fair has recently published step-by step instructions on its official website, which could be a useful reference.

What does this mean for IP protection?

Even though the Canton Fair has gone digital, the good news is that the organisers have introduced a virtual IP Complaints Centre where it will still be possible for IP owners to make complaints against infringing sellers. The detail of the virtual IP Complaints Centre can be found on the Canton Fair website.

The process of making a virtual complaint is broadly similar to the process that was used in previous physical Canton Fairs. But, obviously, there are also differences to consider – some that could be helpful for IP owners and some less so.

Potential positives

There are a number of potential positives.

Firstly, online searching. Products and sellers will be easily searchable online, which could make it easier and quicker to target products that may be relevant from an infringement perspective.

Secondly, online takedown. Complaints will, of course, be filed online and takedowns can, therefore, be completed rapidly once infringements are identified. It is a positive that Customs will also join the live stream and assist the trade fair online, which enable the Customs actions to be instant if necessary for IP protection.

Thirdly, all-weather surveillance. In addition, it should make it more difficult for sellers to hide the alleged infringing products “under the table” which, in our experience, happened relatively regularly. For example, it was not uncommon to patrol the Canton Fair on the first day and find none or very few infringing products, only to find on the second day there were many more infringing products on show because infringing sellers knew that the first day was when most of the foreign companies patrolled the Canton Fair. The transparency of an online virtual Canton Fair remove some obstacles of targeting alleged infringing products.

Possible challenges and counter measures

However, there are likely to be challenges at the same time.

Firstly, evidence preservation. In our view, one of the biggest difficulties in the virtual Canton Fair will be the evidence gathering.

Online trade leads to more uncertainty. Less physical evidence will undoubtedly cause complication to fix the evidence. In judicial practice, companies sometimes have difficulties bringing cases to court due to challenges in getting and preserving the substantial evidence. However, especially but not limited for the IPRs such as copyright, trademark and design patent, we are happy to help ease your burden by preserving evidence by doing the webpage notarization and time stamp certification, as well as notarised purchasing on your behalf.

Secondly, infringement identification. From the perspective of identifying infringement, infringement comparison would face challenges without having the physical products to support the complaint especially for patent infringement (including invention patents, utility models and design patent infringement).

This issue could be solved by applying the 3D-display in some degree when comparing the products with the design patent, trademark, copyright, etc. But when it comes to the invention patent and utility model, it is still questionable. Unlike the copyright, trademark and design patent, which mostly can be analysed using the pictures and text, invention patent and utility model shall be compared with the physical products in hand.

There is a possibility that once the IP protection receives the complaints from the right holder, it requires the sellers to send the physical products for comparison offline. However, we still need to wait and see the official detailed guidance.

Your IP enforcement strategy in the future

The world has suddenly changed due to COVID-19. It is predicted that the influence may last for several years and possibly much longer. This is very likely to quicken the pace of the development of digital trade more generally. The IP protection strategy needs to be adjusted accordingly to adapt to this shifting trend.

We have had very significant experience in assisting clients to protect their IP at the Canton Fair with great success. Therefore, we set out some helpful hints and tips below.

Before the Canton Fair: it is all about the preparation

  • Classify your IPRs. Identify your key IPRs and make sure they are registered in China.
  • Arrange your strategy in advance, i.e. to enforce your IP at the Canton Fair, or to use the fair as an opportunity to open a case as well as gathering evidence.
  • Prepare the documents. If you are going to enforce your IP, related documents should be prepared in advance, for example, certificate of registration, power of attorney, business license, etc.

During the Canton Fair: do not be hesitate to protect your IP

  • Make good use of the searching functions of the online Canton Fair. Pay attention to the products from previous infringers. This is a good opportunity to have an in-depth investigation.
  • Notarised purchasing or webpage notarisation can be carried out if you target an alleged infringer. Remember to download the record of the live show displaying the alleged infringing products and save the related information as evidence for further actions.
  • Check out the webpage for IP infringement complaints and learn how to effectively make a complaint. If the evidence gathering is completed, online complaints can be processed.
  • Don’t forget to assert your IP rights to the web visitor throughout the exhibition.

After the Canton Fair: follow up is critical

  • Follow up with the actions taken during the Canton Fair and the evidence gathering.
  • Check again if the infringer you targeted at the Canton Fair has stopped the infringement and keep monitoring if the sellers of similar products misuse your IP right.

Your corporate commercial solutions to the cross-border transaction

Do due diligence beforehand

  • Make sure that you do the due diligence on the potential business partners before each transaction. In previous years, when Canton Fairs took place offline, you were able to come and see, and have an intuitive understanding of the Chinese companies coming to the fair, including their staff and their actual products. They might even invite you to their factory or office where you could have a good look at what they could provide and how they are doing in their facility. However, this year, with the Canton Fair taking place online, buying through the online fair would be of no difference from buying on Alibaba or other B2B e-platforms, which makes doing your due diligence on your Chinese business partner much more important.

Be wary of potential fraud

  • As everything is happening virtually this year, it is very likely to attract fraud. If your “supplier” sends over their bank account information asking for payment for the goods, always double check with the contact person you deal with by phone before making any payment to re-confirm that the account information is indeed that of the supplier.
  • Contact your bank and call the police immediately if you think you have fallen for a scam.
  • You may also want to take good record of all documentation evidencing the transaction as a precaution, although this is a habit that you would need to have whether attending the fair online or offline.

Prepare for contract templates

  • Try to have a properly drafted contract or general terms and conditions attached to each order that you place, and ask the supplier to sign them when accepting the order. Although we understand that people in the business of international trade would prefer to have the legal documents as simple and straightforward as possible for proceeding with the transaction quickly, a properly drafted contract or terms and conditions, which does not necessarily need to be lengthy, will be worth the price when there is a dispute between you and the supplier.

This article was originally published on the website of the law firm Gowling WLG

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